Traditionally, large issuers of debt sell such debt (in the form of tax-exempt bonds, for example) relatively infrequently in single large issuances. For example, for its new money needs the State of California has traditionally issued approximately $500 million to $1 billion of general obligation debt (e.g., bonds) each quarter. These quarterly sale dates do not typically correspond to the demand for the bonds, which demand tends to be in smaller amounts on a daily basis and more evenly spread out. This is particularly true with regard to demand from retail investors.
To correct this supply/demand imbalance, other parties such as registered broker-dealers (“BD's”) and institutional investors traditionally tend to warehouse bonds upon issuance and distribute the bonds more widely over time in what is called the secondary market (i.e., a market into which bonds are sold post-issuance by the bond issuer). Such a secondary market trading may be carried out on trading platforms such as “BondDesk” or “BondBook”. Sales in the secondary market do not directly benefit the bond issuer, however.
Bonds sold in the primary market (e.g. the initial market into which the bonds are sold upon issuance by the bond issuer) are either sold via a negotiated sale (whereby a dealer negotiates with the issuer as to the interest rates) or competitive sale (whereby dealers bid a price to purchase the bonds and the highest price wins). In either case, orders are solicited by dealers from investors and bonds, and are sold at a single point in time (i.e. date of pricing). It is quite common for some maturities in a bond issue either to be oversubscribed (more orders than bonds offered, implying the yield might be too high) or undersubscribed (indicating the opposite). Therefore, issuers do not always receive the exact yield for their debt that matches demand.